Musgrave is emerging as the frontrunner in the bidding war for Londis, according to exclusive research conducted by The Grocer.
Our telephone poll of Londis retailers revealed Musgrave was edging ahead as the preferred bidder with 34% of the vote, ahead of Big Food Group with 31% and Nisa-Today’s in third position with 29%.
Somerfield and the Co-operative Group limped into fourth and fifth place with 4% and 2% of the vote respectively.
However, our poll also showed members were split down the middle over the proposed sale of the symbol group, with 43% in favour, 38% opposed, and the remaining 19% unsure about the best way forward.
The survey follows the unanimous decision of the Londis board on March 4 to back Londis’ advisor KPMG’s recommendation that an outright sale was in shareholders’ best interests.
Many retailers said they were comfortable with the original Musgrave deal, but had baulked at the share options package that went with it, which left four directors walking away with more than £20m between them.
One said: “I was happy with the original deal - except the payout. The directors deserve to be paid out but £500,000 each is more than enough.”
Despite criticism from some quarters over the way the process had been handled, most retailers we polled (77%) said they had had an opportunity to express their views.
However, the Londis Shareholders Action Group (LSAG) said the fact such a large percentage were opposed to a sale simply proved KPMG had allowed people to express their views and then proceeded to take no notice.
If 38% of Londis retailers felt the board had made the wrong decision in proposing a sale, this would be enough to block any deal when it was finally put before shareholders, said LSAG committee member Dave Fenwick. “KPMG clearly hasn’t made a very good case.”
Prospective bidders are now in discussions with KPMG, which is aiming to move into exclusive talks with one preferred bidder by the end of the month, said a spokesman for Londis.
If an agreement can be reached, a circular will be sent out convening an EGM for members to vote on the proposed offer, and a court appointment will be sought to sanction the deal.
However, the immediate priority was to renegotiate the directors’ controversial share options package, which still entitles senior executives to 51% of the share capital in the event of a bid, he added.
“Clearly, the bidders don’t want to spend lots of time talking through a deal unless they know what the options are over the share package.”
Elaine Watson